Are there alternative strategies you’d recommend for this market or nearby markets which are of commuting distance to Danbury?

Alternatively, your sibling might use a 1031 exchange to defer taxes by reinvesting in like-kind properties, though this doesn't directly fund a primary residence.Other ideas include leveraging a HELOC on the rental properties for the down payment, taking out a 401(k) loan, structuring an owner-financed agreement, or a lease-to-own arrangement.

I don't want to violate any of the self-promotion rules on this thread by specifically linking or name-dropping, but it's from a data analytics platform I am working on specifically built for tracking construction, debt, and ownership activity in the Philadelphia region.I will be posting more detailed insights soon. 

Are there specific lenders or servicers that are more likely to call these loans?

Although many properties with a specific zoning code are technically eligible, they would be subject to an extensive waitlist that could last years.

This doesn't replace the need for a MSA that will capture additional clauses needed on a Contractor-SubContractor relationship, this is just a project specific form you would use in addition to the MSA (prepared by your Attorney):This template is for informational purposes only and does not constitute legal advice.

Quote from @Phillip Austin: There are two alternatives to a security deposit, which I speak about in my book.

Feel free to reach out if you have any specific questions, as an investor or a lender happy to share any advice I can!

They can offer valuable insights into the local market, potential rental yields, and specific considerations for a rehab project like the one you're planning.

If you're looking to househack again, then the conventional 5% down is a very viable alternative to the 3.5% down FHA option.